Citigroup Inc. reported a sharp 25 per cent year-on-year increase in second-quarter earnings, beating analysts’ expectations as its trading desks capitalized on volatile markets and its investment banking unit benefited from a resurgence in dealmaking.
The third-largest U.S. lender posted a net income of $4bn, or $1.96 per share, for the quarter ended June 30, surpassing analysts’ average forecast of $1.60 per share, according to LSEG data. The bank’s stock rose 1.3 per cent in early Tuesday trading following the announcement.
“We are at the center of some of the most significant transactions,” said Chief Executive Officer Jane Fraser in a statement, citing the bank’s leading role in several high-profile deals.
Citigroup’s strong performance was fueled by a 16 per cent surge in markets revenue to $5.9bn—its best since Q2 2020—driven by increased client activity amid heightened market volatility following U.S.
President Donald Trump’s announcement in April of sweeping new tariffs. The policy shift sparked turbulence across equity and bond markets, which trading desks typically exploit as investors rebalance portfolios.
In parallel, the bank’s investment banking fees rose 13 per cent to $1.9bn, with mergers and acquisitions activity up 52 per cent year-on-year. Much of the growth came from North American deals in the healthcare and technology sectors. Equity capital markets fees also rose 25 per cent, boosted by a string of high-profile initial public offerings (IPOs) and strength in convertible offerings.
Among major transactions, Citi jointly led the $1.05bn IPO of stablecoin issuer Circle and the $650m listing of retail trading platform eToro. The bank also advised Charter Communications on its $21.9bn acquisition of privately held Cox Communications in May.
Citi’s banking division, led by Viswas Raghavan—who joined from JPMorgan in 2024—has seen accelerated growth, playing a central role in both capital raising and strategic advisory work. The lender noted that financial sponsors, including private equity firms, have become more active as markets regain momentum.
“We are discussing with clients how strategic mandates are evolving in light of some of the uncertainty,” said Chief Financial Officer Mark Mason, referring to the August 1 implementation date for certain U.S. tariffs. “The equity and debt issuance markets remain constructive in light of equity valuations and the direction of interest rates.”
The second-quarter rebound in equity and debt activity followed a brief lull in April and May when markets were jolted by tariff announcements. Since June, however, deal pipelines have reopened, leading to optimism for sustained momentum in the second half of the year.
UBS analyst Erika Najarian said the latest results could mark a turning point for Citi. “Citigroup is a well-known capital return potential story, but 2Q results imply that it could be more than this, which could attract more long-term shareholders that had been reticent about owning shares,” she noted in a client briefing.
Citigroup’s upbeat results come amid broader market optimism that despite trade-related risks, strong balance sheets and recovering investor appetite may buoy financial sector earnings through the remainder of 2025.
